Ag Policy Blog

Durbin Seeks Vote on Crop Insurance Means Testing

By Chris Clayton , DTN Ag Policy Editor

Senate Majority Whip Dick Durbin took to the floor Wednesday to advocate means testing and limits on the crop-insurance premium subsidy.

Durbin, D-Ill., spoke for an amendment both he and Sen. Tom Coburn, R-Okla., offered last year which would reduce the premium subsidy by 15% for people or legal entities with more than $750,000 adjusted gross income. That amendment got 66 votes last year in the Senate.

Durbin said he supports crop insurance. Crop insurance is a better safety net than direct payments and more defensible, but there should be limits in what a person received. He highlighted the growing taxpayer costs to the program, which included $7.1 billion in premium subsidy last year and $1.3 billion in administrative and operating expenses.

The senator said his amendment would affect about 20,000 farmers and save $1 billion. Those figures are over 10 years. Durbin added that currently 4% of farmers account for nearly 33% of all the premium support for the federal government. Those figures come from a Government Accounting Office report last year.

Durbin pointed to some large, diverse operations that have large amounts of premium subsidies now, including one farmer who received $1.8 million in premium subsidies last year. Another farmer's insurance premium was subsidized to the amount of $1.6 million. Durbin pointed out the administrative and operating costs paid on that one multi-state policy was $433,000.

"I think he can afford to pay a little more," Durbin said.

Under the Durbin-Coburn plan, an Illinois farmer whose premium subsidy was $740,000 last year would still receive a premium subsidy of $630,000.

"If we can't say to the 1% of farmers, the wealthiest of the country, that you are going to take a slightly diminished federal subsidy for your crop insurance, then we are not very good budget cutters," he said.

Durbin wants a vote again this year on the amendment as a coalition of more than 30 groups sent a letter to every senator explaining the agreement reached in the Senate Agriculture Committee to link conservation compliance to eligibility for the crop insurance premium subsidy. In return for the compliance measure, farm groups were able to get the coalition supporters to agree to drop the means-testing language form the committee bill. Thus, the farm and conservation groups oppose any changes to their agreement.

The Durbin-Coburn amendment obviously would rock that boat.

Durbin said he supports tying conservation compliance to crop insurance premium subsidies anyway.

"I don't think it's too much to ask for farmers participating in the crop insurance program also participate in conservation practices to protect farmland across this country," Durbin said.

Votes on amendments to the Senate version of the farm bill will continue Thursday.

I can be found on Twitter @ChrisClaytonDTN


To comment, please Log In or Join our Community .

Tana Farhat 5/11/2014 | 6:08 PM CDT
Durbin Amendment is part of Dodd-Frank financial system that requires the Federal Reserve to limit and fees and charges imposed to retailers of debit card. The reason why Citigroup Inc. is promoting their credit card promo through mail. Resource for this article: <a title="Citigroup pushing record number of credit card offers via mail" href="">Citigroup pushing record number of credit card offers via mail</a>
Ryan Siebenthal 5/27/2013 | 4:07 PM CDT
I would be ok with the means test on crop insurance if they (the legislature's) would start with those on all food stamps and welfare first. That way they could show us the government is serious about saving money and cutting cost.
John Olson 5/24/2013 | 9:40 PM CDT
For government to guarantee that the largest farmers can insure the greatest profitability for minimal cost is insane. Government is stealing from smaller farmers a fair and equal opportunituy to compete. Such schemes are vile, unAmerican, and malicious.
W Lee Deutsche 5/23/2013 | 2:45 PM CDT
After all the soil erosion we experienced with our 8.5 plus inches rain in
April,conservation compliance must be linked to crop insurance eligibility.
It's disheartening to see all the "recreation tillage".